I’ll admit that the mortgage interest deduction doesn’t sound very exciting. It lacks the dramatic intensity of other issues that are driving this election: unemployment, the loss of homes, the problem of a nuclear Iran, the fate of Medicare, the fate of legalized abortion. But the mortgage interest deduction is the single thread that, if the Democrats keep pulling it, will unravel the Romney-Ryan campaign. Just as abortion is such a volatile issue in America because it symbolizes the very boundaries of pleasure, the mortgage interest deduction resonates way beyond simply being able to get, in effect, reimbursed for part of the interest you pay every year on your home loan. The mortgage interest deduction has to do with the nature of American capitalism itself.
Briefly: if you hold say, a 30-year fixed mortgage on your house, then for at least the first ten years something like 80 percent or 90 percent of your monthly mortgage payment is going not toward the principal, but toward the interest on the principal. Even at the current historically low rates of mortgage interest, and even by medieval standards, that is usurious. What no one will ever talk about in public in this country is what have been excruciating rates of interest on home loans. Ever since the collapse of the real-estate industry in 2008, you hear about how the wildly abstract and speculative derivates market caused the housing meltdown. What you never hear is the simple truth that the people who took out mortgages that they couldn’t pay for couldn’t pay for them because the mortgages came with usurious rates.
The banks help create wealth, the banks are an essential engine driving the economy. Without the dynamo of modern banking, modern democracy would not exist. Long live reasonable, temperate, socially responsible bankers! I remember visiting Spain not long after it became a democracy and seeing a new bank standing on every corner like a sentinel of freedom. But the banks and related industries like the credit-card industry have been operating for decades almost unconstrained. It was a Democrat, Bill Clinton who signed into law a repeal of major sections of the Glass-Steagall act, thus removing the wall between banking and commercial transactions-and helping cause the financial disaster in 2008. It was a Democrat, Joe Biden, who voted-along with many other Democrats-to make it harder to declare bankruptcy, thus pleasing the credit-card companies whose exorbitant interest rates have Americans choking with Debt.
There are arguments against the mortgage interest deduction, but I won’t bore you with them because they are all wrong. Allowing people to get back, every year, what amounts to a fraction of the money they paid in usurious interest to their bank is keeping the middle class afloat. Critics of the law say, Look at all the countries that don’t allow that deduction! But those countries, like France and Germany, have other social policies in place that keep people from falling through the cracks. Unlike America, for example, they make sure that their citizens have access to healthcare. With the extra few thousand dollars a year that middle-class homeowners receive through the mortgage interest deduction, they can just barely afford to pay for soaring healthcare premiums.
The narrative now is that last Thursday night’s combat between Biden and Ryan was a generational one since Biden is nearly 30 years older than Ryan. This is absurd. In generational terms, the election has always been between the aging group of mostly white voters that hate Obama and would rather have a golden retriever in the White House than a young black president, and younger Americans who worry that the Republicans will take away their Social Security and Medicare when they grow old. Ryan might be only 32, but he was born middle-aged and by now, he is in emotional terms well past 100, though without a drop of the wisdom and humanity that accompany ripe old age. Biden, on the hand, may be just shy of 70, but he is full of heart, of emotional vitality.
Yet on Thursday night, he was constrained by the liberals’ ridiculous sense of decorum, by the fear that being too aggressive will drive voters away. That is a tragic miscalculation. The country is addicted to violent TV shows and movies, for heaven’s sake. People love the spectacle of virtuous aggression. When Biden directly challenged Ryan to say whether a Romney presidency would eliminate the mortgage interest deduction-i.e. throw the middle class to the ground and kick it in the face-Ryan ignored the question. The feisty Biden asked him again, and I began cheering so loud that I woke up my 6-year-old son, who came out of his bedroom rubbing his eyes and asking how “Ron Paul” was doing. (He always confuses Ron Paul with Paul Ryan.) Ryan ignored the question again and that was when Biden should have delivered his knockout punch and asked Ryan directly what the fate of the mortgage interest deduction would be in a Romney presidency but… Biden let it go, and the debate moved on.
To my wife’s annoyance, I showed my delighted son what a devastating uppercut to the jaw looks like and led him back to his room. Then I went to sleep dreaming of FDR and Oscar de la Hoya.
